Friday 13 July 2007 19.48 EDT
First published on Friday 13 July 2007 19.48 EDT

Sheffield United yesterday threatened to take legal action against West Ham United and the Premier League over the Carlos Tevez affair. Their warning came after being refused leave to appeal against a judgment by an arbitration panel that chose not to order a fresh disciplinary hearing against the London club. Mr Justice Andrew Smith refused United, who were being backed by Fulham, leave to take the case to the Court of Appeal.

United had sought to persuade the judge that Sir Philip Otton, the chairman of the arbitration panel, had made an error in law by not referring the case back to an independent disciplinary panel. They considered that this justified an appeal against Otton's ruling in the commercial court. Their application failed but United - who claim relegation will cost them £50 million - have not abandoned attempts for legal recourse. The club said in a statement: "This application was made on very limited grounds and it has also been denied on very limited grounds.

"Sheffield United are not precluded from taking further action whether against the Premier League or West Ham. We will consider our position with our professional advisers and make further statements in due course." The club's lawyer, Paul Stothard, added that, "in playing a player who had not been properly registered [West Ham] could still be the subject of further claims". That could constitute a compensation claim that could also extend against the league.

Justice Smith said yesterday that his "decision does not amount to a general endorsement of how this matter was dealt with". West Ham had originally been ordered to pay a £5.5m fine, rather than having points deducted, over the fielding of Tevez.

However, yesterday's rejection of the Blades' application was interpreted as an encouraging move by both West Ham and the offshore companies that brought Tevez to the Premiership: Media Sports Investment and Just Sports Inc. Those parties hope that the judgment helps ease the pressure on the Premier League and will in turn lead to it sanctioning the completion of Tevez's partly agreed transfer to Manchester United, though the league yesterday stated that Justice Smith's ruling changed nothing in its eyes.

West Ham know that any deal would have to gain league approval, and that would still require the Premiership champions opening formal negotiations with West Ham, something they have so far declined to do.

One development that clouds the issue is that Kia Joorabchian, who represents MSI-JSI, has since Thursday been the subject of an international arrest warrant over allegations of money laundering. Joorabchian denies any wrongdoing, telling friends that the warrant is an attempt to bring him to Brazil as a witness in a "politically motivated" trial surrounding Corinthians, the Brazilian club in which MSI is a significant investor and from which Tevez and Javier Mascherano joined West Ham.

Joorabchian is said to be particularly surprised since he claims already to have offered to attend the trial as a witness. "I have co-operated fully with the authorities in Brazil and have previously offered to speak to them directly, an offer that they have not taken up," he said.

"The investigation has been provoked by the desire of a small group of individuals in Brazil to gain control over Corinthians. All payments made to Corinthians by MSI were cleared through and approved by the Brazilian Central Bank."

Warring parties

West Ham United

Fined £5.5m in April for withholding documents pertaining to Tevez's transfer to Upton Park, they chose to hang on to the Argentinian for the final matches of last season. By retaining his registration they undertook to rip up third-party agreements with MSI-JSI that governed the player and to treat him in all ways as their own asset.

Premier League

Given the ultimate sanction over transfer deal when West Ham declined to cancel Tevez's registration, allowing it to dictate to the club that they must secure a proper fee.

MSI-Just Sports Inc

The companies Kia Joorabchian represents also claim exclusive rights over Tevez. Terms agreed on a two-year loan to Manchester United hampered by the league's insistence that his registration lies with West Ham. Maintain the three-year registration tying Tevez to Upton Park is worthless since the contract entered into with West Ham was for a single season's loan, now expired.

Manchester United

They want Tevez but realise it might need the Court of Arbitration for Sport to sort out the apparently intractable arguments.